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ARMSTRONG WORLD INDUSTRIES ANNOUNCES SEVERAL SIGNIFICANT DEVELOPMENTS IN CONNECTION WITH ITS 1992 FINANCIAL RESULTS

 LANCASTER, Pa., Jan. 14 /PRNewswire/ -- Armstrong World Industries, Inc. (NYSE: ACK), announced today several significant developments in connection with its 1992 financial results.
 They are:
 -- The adoption of three new accounting standards (SFAS Nos. 106, 109, and 112) retroactive to January 1, 1992, that will result in an after-tax, non-cash charge to earnings of an estimated $185 million, or $4.84 per share (as discussed in the company's 1991 annual report and third-quarter 1992 letter to shareholders).
 -- The provision for restructuring charges of approximately $23 million after tax, or 63 cents per share. This is in addition to the $95.2 million after-tax restructuring charges ($2.56 per share) announced with the third-quarter results.
 -- The probability that, excluding the above special charges, fourth-quarter earnings will still fall below the 28 cents per share average earnings expected by security analysts. However, the anticipated net earnings are expected to be better than the loss of 7 cents per share in the fourth quarter of 1991.
 The company provided this additional detail as background:
 ACCOUNTING CHANGES:
 -- Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." In applying the provisions of SFAS No. 106 -- which mainly concern certain medical and life insurance benefits for retired employees -- Armstrong will recognize the cost of these benefits, effective at the beginning of 1992 on an accrual basis, replacing the current pay-as-you- go method. The pre-tax transition obligation as of the start of 1992 amounts to approximately $220 million ($135 million after taxes, or $3.64 per share). An estimated $8.4 million ($5.6 million after taxes, or 15 cents per share) will be charged to 1992 earnings in addition to the amounts charged under the pay-as-you-go method.
 -- SFAS No. 112, "Employers' Accounting for Postemployment Benefits." This standard reflects benefits to former or inactive U.S. employees after employment but before retirement and includes elements such as salary continuation, disability-related benefits and the continuation of health care benefits and life insurance coverage. The pre-tax transition obligation as of the beginning of 1992 amounts to approximately $60 million ($37 million after taxes, or $1.00 per share). An estimated $2.7 million ($1.8 million after taxes, or 5 cents per share) will be charged to 1992 earnings in addition to the amounts charged under the pay-as-you-go method.
 -- SFAS No. 109, "Accounting for Income Taxes." Under this standard, tax benefits totaling approximately $5.5 million for 1992, applicable to deductible dividends paid on unallocated shares held by an Armstrong employee stock ownership program (ESOP), are credited directly to retained earnings. Under the previously employed SFAS No.96, the tax benefits on deductible dividends paid on unallocated shares were recognized in the earnings statement. This change has no impact on earnings per share for 1992.
 The company's cash flow will not be affected by these three accounting changes. The 1992 quarterly financial results will be restated in the company's 1992 annual report to reflect these changes.
 RESTRUCTURING COSTS:
 Fourth-quarter restructuring costs of about $30 million before tax ($24 million after taxes, or 64 cents per share) reflect Armstrong's decision to close its ceiling products plant in Ghlin, Belgium, and accruals for costs associated with termination of additional employee positions beyond those announced at the end of October.
 FOURTH-QUARTER OPERATING RESULTS:
 While sales will be about 2 percent higher than those of the fourth quarter of 1991, Armstrong said manufacturing, selling, and administrative costs will also reflect year-to-year increases. However, after-tax earnings from continuing businesses, excluding restructuring costs, will show improvement because of a positive swing in the "Other Income and Expense" category -- primarily caused by foreign exchange gains.
 Armstrong's fourth-quarter sales and earnings will be announced on January 25.
 -0- 1/14/93
 /CONTACT: Armstrong Public Relations, 717-396-3313/
 (ACK)


CO: Armstrong World Industries, Inc. ST: Pennsylvania IN: SU: ERP

CC -- PH014 -- 4850 01/14/93 11:51 EST
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Date:Jan 14, 1993
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